This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

When Shopkorn Is Shopworn...

Is this market making sense to anybody besides Buzz & Batch? Let's parse the text of legendary trader Stanley Shopkorn as presented in this morning's Journal. Shopkorn, who has probably out-traded 99% of the people on this planet, had this to say about his departure from Moore Capital, one of the best hedge funds going: "The market isn't responding to what it normally responds to, like the Fed aggressively raising interest rates. The volatility in the market has also increased, both up and down, and the normal corrections one might expect take place very quickly or just not at all."

What Shopkorn is saying, of course, is that the market should go down not up, but the buyers don't seem to be acting rationally. How should we interpret this judgment?

One way to say it is that things have simply changed. The market is now dominated by individuals and mutual funds that think equities are the only place to be, irrespective of the backdrop, because all other investments stink, and stocks can make you rich. Hey, what's so wrong with that? They have!

The second way is to say that Shopkorn got beaten by the Buzz and Batch crowd that think that everything Shopkorn says is negative and just plain irrelevant: interest rates, earnings, Greenspan, inflation. Buzz and Batch believe these have nothing to do with technology investing, which is in its own world, a world that is rapidly overtaking the rest of the trading world.

Buzz and Batch never sell unless they get a margin call. They scheme to keep stocks up and create false breakouts and terrific charts. They beat up analysts not to downgrade stocks and they wield their hefty commission dollars to back up their points. They only have black tickets in their hands. (That's slang on Wall Street for buy tickets.)

Buzz and Batch don't keep cash on hand and they don't raise cash. They think that half-point raises in discount rates are meaningless attempts by the old regime to try to rein in something that doesn't really exist: inflation.

Most of all they know that if they fail at the Hot Hot Hot mutual fund, they will just pick up and go to another. They are on TV for being up 100% last year. They will get the money. And they are idiots.

In the end, I don't know what makes the market change. I do know that the Buzz and Batch types are driving a lot of the grizzled old vets out of the business. Seems like they bite the dust once a week these days .

Very sad.

James J. Cramer is manager of a hedge fund and co-founder of TheStreet.com. At time of publication, his fund had no positions in any stocks mentioned. His fund often buys and sells securities that are the subject of his columns, both before and after the columns are published, and the positions that his fund takes may change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. Cramer's writings provide insights into the dynamics of money management and are not a solicitation for transactions. While he cannot provide investment advice or recommendations, he invites you to comment on his column at jjcletters@thestreet.com.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 16,760.97 -43.74 -0.26%
S&P 500 1,932.91 -13.25 -0.68%
NASDAQ 4,390.5780 -31.5070 -0.71%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs